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BIBA launches new online facility to help brokers in decision making process

IBR Staff Writer Published 23 December 2016

The British Insurance Brokers’ Association (BIBA) has launched a new online facility to help its members review the financial position of unrated insurers.

Dubbed as the BIBA Litmus Test Report, the online facility which is free-to-use for the association brokers was developed through the analytical support from Litmus Analysis.

The BIBA Litmus Test Report leverages on the data from A.M. Best to showcase several important financial ratios for a number of unrated insurers who are frequently used by BIBA members.

It benchmarks each company’s ratio in comparison to a representative UK insurer cohort to show financial strength at the point in time of the publicly available financial data among other relative terms to other similar firms.

Litmus Analysis managing director Peter Hughes said “This tool will help brokers in their decision making process.  It takes financial data provided by A.M. Best and condenses it into a number of key financial pointers that can be interpreted using the guides. 

“This is a giant leap forward for brokers who previously may have had no support when wading through insurer report and accounts to ascertain the financial strength of a company.”

However, the BIBA Litmus Test Report will not provide any ratings to insurers like how they are done by popular rating organizations.

BIBA chief executive Steve White said: “At present there is no legal or regulatory requirement for an insurer to have a rating, nor is there a legal or regulatory requirement for an insurance broker to use only rated carriers and this online tool will give valuable support for our members when deciding whether the financial standing of an insurer they are considering placing business with is sufficiently robust or not.”

The report though will illustrate financial ratios for investment, underwriting and reserve leverage percentages along with underwriting liquidity and profitability.

Along with the data shown, various detailed guides authored by Litmus will be put up on the online facility to assist brokers in understanding the numbers prior to making their decision on associating with a particular insurer.

Through a simple search option, the online tool is said to provide an initial coverage of 30 insurers that can be checked for.


Image: BIBA’s new online facility aims to help brokers to review financial position of unrated insurers. Photo: courtesy of BIBA.